The state attorneys general of California, Wisconsin, Iowa, Connecticut, Kansas, Maryland, Florida, Massachusetts, West Virginia and the District of Columbia oppose the settlement, The Wall Street Journal reported, citing lawyers close to the case. Illinois, Ohio, North Carolina, New York and Utah are willing to join the DOJ in the settlement, with Kentucky, Louisiana, Michigan and Minnesota undecided, the report said.

On Monday, Massachusetts became the first state to announce its opposition to the deal. Massachusetts Attorney General Tom Reilly called for tighter curbs to be placed on Microsoft in order to protect competitors.

Under the terms of the settlement announced on Friday, Microsoft must license its operating system to key computer manufacturers on uniform terms for five years. The settlement also requires that Microsoft not retaliate against companies that use middleware software from companies other than Microsoft and bans exclusive support or development agreements for specific Microsoft software.

The proposed settlement between Microsoft and the Department of Justice for now does not change the European Commission's investigation into Microsoft's business practices.

Commission spokeswoman Amelia Torres admitted: "There might be certain features in the settlement which might or might not have an impact on the Commission's own investigation involving Microsoft," she said.

"The investigation is ongoing and it's at a preliminary stage," Torres said.

Microsoft realizes a settlement in the US lawsuit won't end its case in Europe, but the company said it hopes to settle with the Commission as well.

The EC is investigating whether Microsoft violated Europe's rules to extend its position in the market for low-end server operating systems by using its dominant position in PC operating systems, and is also examining Microsoft's software-bundling tactics, with Windows Media Player a particular focus.